1. Which inventory system provides the more effective means of controlling inventories? Why? 2. Can a company change its method of costing inventory? Explain. 3. The following units of a particular item were available for sale during the year: Beginning inventory Sale First purchase 150 units at RM75 120 units at RM125 400 units at RM78 200 units at RM125 300 units at RM80 290 units at RM125 Sale Second purchase Sale The firm uses the perpetual inventory system, and there are 240 units of the item on hand at the end of the year. What is the total cost of the ending inventory according to (a) FIFO, (b) LIFO, (c) average cost method. 4. The units of an item available for sale during the year were as follows: 1 Jan 17 Feb 21 July 23 Nov Inventory Purchase Purchase Purchase 27 units at RM120 54 units at RM138 63 units at RM156 36 units at RM165 There are 50 units of the item in the physical inventory at 31 December. The periodic inventory system is used. Determine the inventory cost by (a) the FIFO, (b) the LIFO and (@ the average cost methode PI123456.89 110 23 NOV Purchase 36 units at RM16) 12 LET There are 50 units of the item in the physical inventory at 31 December. The periodic inventory system is used. Determine the inventory cost by (a) the FIFO, (b) the LIFO and (c) the average cost methods. 3. Assume that a fim separately determined inventory under FIFO and LIFO and then compared the results. (i) In each space below, place the correct sign >/ =) for each comparison, assuming of periods of rising prices. a. FIFO inventory b. FIFO cost of goods sold c. FIFO net income d. FIFO income tax LIFO inventory LIFO cost of goods sold LIFO net income LIFO income tax (ii) Why would management prefer to use LIFO over FIFO in periods of rising prices? 6. On the basis of the following data, determine the value of the inventory at the lower of cost or market. Commodity X3 Y10 A19 J2 J8 Inventory Quantity 9 16 12 15 25 Unit Cost Price RM300 110 2 75 51 96 Unit Market Price RM320 115 260 45 100 State the accounting convention applied when the lower of cost or market is used in valuing inventory